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LEGAL BASES
(continued)
LEGAL BASES
(continued)
Bases of PPSAS
Pronouncements issued by IPSASB (IPSASs),
IASB, PICPA, International Organization of
Supreme Audit Institutions and others.
Relevant factors, including best accounting
practices, and
Capacity of Agencies to comply with PPSAS.
Objective
To set out the recognition, measurement,
presentation and disclosure requirements for
financial reporting in the Philippine Government.
Scope
PPSASs set out requirements dealing with
transactions and other events in general
purpose financial reports.
PPSASs are designed to apply to the general
purpose financial reports of all public sector
entities other than Government Business
Enterprises (GBEs)
Applies to all NGAs, LGUs and GOCCs not
classified as GBEs
Methodology
I. Evaluation of IPSAS
. Studied and evaluated each IPSAS to
determine applicability
II. Development of PPSAS
. Provided the PAG for IPSAS provisions
which were not adopted
. Exposed drafts to stakeholders
. Addressed fundamental issues
. Conducted Focus Group Discussions
Content
PPSAS consists of
Approach to Implementation
28 out of 32 IPSAS shall be implemented
Phased Implementation
Phase 1 (25 PPSAS for implementation in
2014)
Phase 2 (3 PPSAS for implementation in
2015)
Phase 1
(continued)
Phase 1
(continued)
Phase 1
(continued)
PPSAS SUMMARY
PPSAS 1- Presentation of FS
Objective To set overall considerations for the:
Presentation
Structure
Minimum content of Financial Statements
Salient Features
. Accrual basis except for transactions
PPSAS 1- Presentation of FS
Complete set of Financial Statements:
1.
2.
3.
4.
5.
Salient Features
Cash flows for operating activities are reported using the
direct method.
Cash flows exclude movements between items that
constitute cash or cash equivalents.
Investing and financing transactions that do not require
the use of cash shall be excluded from the cash flow
statement, but they shall be separately disclosed.
Salient Features
.
PPSAS 12 Inventories
Salient Features
Inventories are measured at the lower of cost and
net realizable value.
If acquired through a non exchange transaction,
their cost shall be measured as their fair value as at
the date of acquisition.
Cost is determined on weighted average basis
Write- downs to net realizable value are recognized
as an expense. Reversals arising from an increase
in net realizable value are recognized as reduction
of the inventory expense in the period in which
they occur.
PPSAS 13 Leases
Salient Features
Lease is classified as a Finance lease if:
(a) The lease transfers ownership of the asset to the
lessee by the end of the lease term.
(b) The lessee has the option to purchase the asset at
a price that is expected to be sufficiently lower
than the fair value.
(c) The lease term is for the major part of the
economic life of the asset.
(.Operating lease does not transfer substantially all
the risks and rewards incidental to ownership of the
asset.
PPSAS 27 Agriculture
Salient Features
Prescribes the accounting treatment and disclosures
related to agricultural activity.
Agricultural activity- management by an entity of the
biological assets for sale, or for distribution at no
charge or for a nominal charge or for conversion into
agricultural produce or into additional biological
assets.
January 1, 2014
Objectives
To provide new accounts for the adoption of
Major Changes
a. Coverage is limited only to all national
ACCOUNT GROUPS
Codes are assigned to account groups to
facilitate location of accounts in the general and
subsidiary ledgers, to provide systematic
arrangement and classification of accounts and
facilitate preparation of the consolidated
financial reports as follows:
Code
1
2
3
4
5
Account Groups
Assets
Liabilities
Equity
Income
Expenses
-011
Major Changes
c. New accounts were provided for
the implementation of the
Philippine Public Sector
Accounting Standards.
New Accounts
Example:
New Accounts
10202010 Investments in Treasury Bills Local
IPSAS 29-30
10202011 Allowance for Impairment - Investments
in Treasury Bills - Local
10501010 Investment Property, Land
IPSAS 16
10501011 Allowance for Impairment - Investment
Property, Land
In compliance with
In compliance with
IPSAS 29-30
In compliance with
In compliance with
IPSAS 16 & 21
New Accounts
1 01 04 010
Cash-Treasury/Agency
Deposit, Regular
1 01 04 020 Cash - Treasury/Agency
Deposit, Special Account
1 01 04 030 Cash - Treasury/Agency
Deposit, Trust
Major Changes
d. Some accounts were deleted since
these accounts are for use by local
government units or governmentowned and/or controlled corporations,
while other accounts are no longer
applicable to national government
agencies.
Deleted Accounts
Example:
101 Cash in Vault
for LGUs use
127 Real Property Tax
for LGUs use
Receivables
128 Special Education Tax
for LGU use
Receivables
144 Due from Other Funds
not allowed
145 Due from Subsidiaries/
for GOCCs
Affiliates
use only
Major Changes
e. Some accounts were either expanded
or compressed. For instance, expense
accounts for repairs and maintenance
and depreciation of property, plant and
equipment which were previously
presented per asset account were
compressed based on the major
account classification
Compressed Accounts
Example:
811 Repairs and Maintenance and
Office Buildings
Maintenance812 Repairs and Maintenance Buildings and Other
School Buildings
Structure
813 Repairs and Maintenance Hospitals and Health
Centers
814 Repairs and Maintenance Market and Slaughterhouses
815 Repairs and Maintenance -
5 02 13 040
Repairs
Compressed Accounts
Example:
811 Depreciation-Office
Buildings
and
812 Depreciation-School
Structures
Buildings
813 Depreciation-Hospitals
and Health Centers
814 Depreciation-Market
and Slaughterhouses
815 Depreciation-Other
Structures
01
02
03
04
05
06
99
Buildings
School Buildings
Hospitals and Health Centers
Markets
Slaughterhouses
Hostels and Dormitories
Other Structures
01
02
03
04
05
06
99
Buildings
School Buildings
Hospitals and Health Centers
Markets
Slaughterhouses
Hostels and Dormitories
Other Structures
Expanded Account
Example:
716 Subsistence, Laundry
Subsistence
and Quarters
Allowance
Allowance
Laundry
5 01 02 050
5 01 02 060
Allowance
5 01 02 070
Quarters
PURPOSE:
Specific Guidelines/Procedures
Maintain set of books by fund
Transfer the balances to
Specific Guidelines/Procedures
Analyze balances as of December
31, 2013
Prepare JEVs to close the accounts
and transfer to the appropriate
account
Furnish COA Auditor and GAS
copies of the JEVs
Specific Guidelines/Procedures
Appropriate SLs shall be maintained
Revenue/income accounts shall be
Specific Guidelines/Procedures
Public infrastructures and
Specific Guidelines/Procedures
ITEMS IN TRANSIT (284)
If the balance pertains to delivered items but
Responsibility
The Chief Accountants/Heads
of Accounting units and
Budget Officers/Heads of
Budget Office units shall be
responsible for the conversion
of these accounts
Transitory Provisions
New account titles should be used
in the implementation of the
PPSAS
Accounts that have not been
converted due to issues not
settled as of the conversion date
shall be converted to the most
appropriate account in the RCA
until further defined
ADDITIONAL
ACCOUNTS
Created in 2014
New Accounts
New Accounts
New Accounts
New Accounts
10
6
10
6
10
6
10
6
10
6
10
6
10
6
10
6
10
6
10
6
12 00
0
12 01
0
12 01
1
12 01
2
12 02
0
12 02
1
12 02
2
12 03
0
12 03
1
12 03
2
New Accounts
10
6
10
6
10
6
10
6
10
6
10
6
10
6
10
6
10
6
12
12
12
12
12
12
12
12
12
New Accounts
1 0
6
1 0
6
1 0
6
1 0
6
1 0
6
1 0
6
1 0
6
1 0
6
1 0
6
12
12
12
12
12
12
12
12
12
New Accounts
1 0
6
1
2
1 0
6
1
2
1 0
6
1
2
1 0
6
1
2
1 0
6
1
2
Concession Assets
Concession Assets
New Accounts
Liability
20
1
20
5
0
1
0
1
09
0
02
0
Service Concession
Arrangements Payable
Deferred Service Concession
Revenue
Revenue
4 0 0 24 Service Concession Revenue
2 2 0
New Accounts
Expenses
Revised/Modified Accounts
Expenses
101
01
020
97,300
101
02
020
1,303,000
101
02
030
1,412,000
103
03
010
7,800,000
104
04
010
1,000,000
104
04
030
200,000
104
97,300
111
1,303,000
112
1,412,000
136
7,800,000
155
1,200,000
1 99 02 030
672,000
Other Prepayments
Office Equipment
1 99 02 990
1 06 05 020
5,000,000
2,480,000
1 06 07 010
2,615,000
1 06 99 990 1,637,000
185
221
222
5,672,000
2,480,000
2,615,000
250
1,637,000
321
322
2,615,000
350
1,117,300
1,840,000
1 06 05 021
1,840,000
1 06 07 011
2,615,000
1 06 99 991
1,117,300
412
502,000
Due to GSIS
413
51,100
Due to PAG-IBIG
Due to PHILHEALTH
414
13,000
415
14,000
416
606,000
Government Equity
501
17,457,900
Due to BIR
02
01
010
502,000
Due to GSIS
02
01
020
51,100
Due to PAG-IBIG
02
01
030
13,000
Due to PHILHEALTH
02
01
040
14,000
Due to NGAs
02
01
050
606,000
Government Equity
01
01
010
17,457,900
Other Matters
The Government Accounting
Manual
The Barangay Accounting Manual
The Local Government Chart of
Accounts
The Corporate Chart of Accounts